Objective To evaluate repair of critical-sized cranialdefect with tissue engineered bone fabricated by coral, bone mesenchymal stem cells(MSCs) and sustainedly released recombinant human bone morphogenetic -protein 2 (rhBMP-2) by collagen. Methods Three scaffolds of rhBMP-2+coral,collagen+rhBMP-2+coral and MSCs+collagen+rhBMP-2+coral were fabricated. Forty New Zealand rabbits were made the models of critical-sized defects and divided into5 groups according to different implants: group Ⅰ, auto-ilium; group Ⅱ,coral; group Ⅲ, rhBMP-2+coral; grop Ⅳ, collagen+rhBMP-2+coral; and group Ⅴ,MSCs+collagen+rhBMP-2+coral. Repair of bone defect was evaluated after 8 and 16 weeks of implantation by gross obeservation, X-ray,HE staining and Masson’s trichrome staining. Results Repair ofbone defect in group Ⅴ was similar to that in group Ⅰ, andwas better than that in group Ⅳ; and group Ⅲ was worse. The gross appearance showed that defect region filled with bony tissue which had similar strength to adjacent bone and formed bone union with surrounding bone. The X-ray result displayed high radiopacity(80.45%±2.52% in the 16thweek). Histological observation showed new lamellar bone tissue and with few pore blank area. However, only transpasent fibrous tissue filled the defect in group Ⅱ. Conclusion Collagen may be a suitable sustained release system for rhBMP-2. And MSCs may have important effect on enhancing repair of bone defect. Tissueengineered bone fabricated by MSCs+collagen+rhBMP-2+coral may be a useful material for bone defect repair.